The bank fell to the lowest level in two months, making it
the worst performer in the five-member FTSE 350 Banks Index.
Lloyds’s Chief Executive Officer Eric Daniels forecast a “good
financial performance” for the full year as loan impairments
continued to decline in the third quarter, according to a
statement today.

“U.S. banks give profit and loss details, as do European
banks,” said Joseph Dickerson, a banking analyst at Execution
Noble Ltd. who has a “buy” rating on the stock. “It’s time to
move into the 21st century.”

British banks have long reported first- and third-quarter
results without providing actual numbers, unlike lenders in the
U.S., continental Europe and India that provide detailed
financial statements. The credit crisis spurred Royal Bank of
Scotland Group Plc and Barclays Plc to break with tradition and
issue quarterly financial reports.

“We see little point” to the Lloyds statement, said Hank Calenti, head of bank credit research at Societe Generale SA.
“Today’s contained a grand total of nine numbers, excluding
repetitions,” he said, adding that there was “nothing of value
to trade on in this report.”

The absence of detail was “slightly frustrating,” said
Mike Trippitt, an analyst at Oriel Securities Ltd. in London who
has a “buy” rating on the stock.

‘Trends in the Business’

Lloyds issued more detailed figures for the third quarter
of 2009 because the bank was raising capital, Daniels told
reporters. The lender raised 13.5 billion pounds ($21.6 billion)
in the U.K.’s largest rights offering last year. It is 41
percent owned by British taxpayers after a bailout in 2008. U.K.
Financial Investments Ltd., which manages the government’s bank
stakes, didn’t immediately respond to a call seeking comment.

“This year, clearly, the numbers are not audited and won’t
be until the year end,” said Daniels, 59. “What we are doing
is giving an update for the third quarter. We are doing exactly
as we should be doing which is saying what the trends are in the
business and how we feel about it generally. That’s the purpose
of today’s announcement.”

Lloyds isn’t an investment bank and is not subject to the
“substantial quarterly ups and downs driven by movements in
levels of trading,” Finance Director Tim Tookey said.

Australian Provisions

“We will deliver a good financial performance for the
current financial year,” Daniels said in the statement.
“Impairments for the second half are expected to fall
moderately from the first half,” the statement said. The bank
provided no figures.

Declines in impairments at its U.K. consumer unit have been
offset in part by “ongoing difficulties” in its Irish and
Australian businesses, the bank said. The bank may have “a few
hundreds of millions” in charges relating to its operation in
Australia, said Tookey.

Provisions were 6.56 billion pounds in the first six months
of 2010, compared with 13.4 billion pounds in the year-earlier
period, the bank said in August.

Lloyds, Britain’s second-biggest taxpayer-aided bank, was
helped in the first half of the year by a recovery in
residential and commercial property prices, which caused a
reduction in the number of bad loans. That recovery has now
stalled, with U.K. house prices tumbling the most in 20 months
in October, property researcher Hometrack Ltd. said in a report
yesterday.

‘Continued Improvement’

Lloyds said it expected to see “continued improvement” in
its net interest margin in the second half of the year after
reporting a 2.08 percent margin in the first six months, driven
by higher asset pricing and as mortgage customers were moved
onto higher interest rates.

Due to improved access to the bond markets the bank has
“voluntarily” repaid 7 billion pounds to central banks,
Daniels told reporters.

Lloyds has less than 120 billion pounds of central bank and
government funding, compared with 132 billion pounds in the
first half, Tookey told analysts today.

The bank raised more than the 25 billion pounds of funding
it planned for the whole year by the end of September, the
statement said.

“This is an unequivocal positive for the credit profile of
Lloyds and should serve to bring down wholesale funding costs,”
Execution Noble’s Dickerson said.

‘Good Backdrop’

Lloyds made progress in reducing its balance sheet and
remained “on track” to achieve a reduction of 200 billion
pounds by 2014, according to the statement.

Lloyds dropped 3.2 percent to 67.39 pence at the close of
trading in London, the lowest since Aug. 25. The bank has gained
33 percent this year.

The Lloyds statement “is a good backdrop for the U.K.
banks reporting season,” Michael Helsby, an analyst at Bank of
America Corp. in London who rates Lloyds a “buy,” said in a
note today. “U.K. bad debts appear to be improving quicker than
expected, and margins continue to rise.”